Delaware Court of Chancery forum selection clause found enforceable by California Supreme Court, despite depriving plaintiff the right to a jury trial

Delaware corporations headquartered in California can now successfully move to dismiss investor suits filed in California when the corporations’ governing documents contain forum selection clauses mandating the Delaware Court of Chancery as the exclusive forum for such claims.

In a July 21, 2025 decision, the Supreme Court of California overturned two lower courts’ rulings and found that California public policy concerns could not overcome mandatory forum selections clauses in a company’s governing documents. Both lower courts had found that the plaintiff—a minority stockholder in Delaware corporation headquartered in California—could maintain its claims for breach of fiduciary duty, breach of contract, fraud, and others, in California under the state’s strong public policy favoring a right to a jury trial. Because the Delaware Court of Chancery does not permit jury trials, the lower courts refused to acknowledge the forum selection clause in the corporation’s charter designating the Delaware Court of Chancery the exclusive forum. As such, defendants’ motion to dismiss for forum non conveniens was denied.

On appeal, the California Supreme Court maintained California’s sound and settled public policy for jury trials, but univocally found that the loss of a jury-trial right cannot be the sole basis to invalidate a forum-selection clause: “A forum selection clause is not unenforceable simply because it requires the parties to litigate in a jurisdiction that does not afford civil litigants the same right to trial by jury as litigants in California courts enjoy.”

The ruling is significant in that it establishes meaningful predictability that a company’s forum selection clauses will be upheld. And to the extent the Delaware Court of Chancery is the selected forum—as is common in charters for Delaware corporations—the litigation can go forward with the efficiency afforded by the country’s premier business court. Even more, the company no longer needs to worry about equity-based and intra-corporate disputes being litigated before an unpredictable California jury.

A copy of the decision can be found here.